Friday, October 16, 2009

Rakesh Jhunjhunwala latest interview ET

‘No meaningful correction before another rapid rise’
Markets Will Remain Far, Far, Far Above The Lows Of October And March Last, Says Rakesh Jhunjhulwala
THE flood of money waiting on the sidelines means that the market is unlikely to see a meaningful correction anytime soon, says Rakesh Jhunjhunwala, leading stock investor, and partner, Rare Enterprises. In an interview with ET, he says a delayed recovery in the world economy is not a bad thing for India, as we stand to gain from moderate commodity prices.

You mentioned at a recent seminar that the market appears poised for a bust. What according to you, are the symptoms?

What I said has been grossly misinterpreted. What I said was that this kind of systematic rise in the market, where the market goes up, then corrects briefly — both price and time wise — and then once again resumes its gain, cannot even have a meaningful correction without a burst of a rise, which means a very, very rapid rise.

Key indices have more than doubled in the past seven months, many midcaps have given unbelievable returns. Is the market over heated?

I surely feel that in terms of commitment and belief, the market is not heated at all. There is disbelief all around and huge money on the sidelines. This is a reason why we don’t get any meaningful correction, and this is also the reason why we could still have a sharp rise ahead of us.

But a correction is only inevitable. Whenever that happens, do you see the market retesting the lows of March 2009 or October 2008?

Markets by their very nature will naturally correct at some point of time. The markets, as I see them, are not as of the moment indicating any signs of meaningful correction. Whenever markets correct, I do not expect the correction to be anywhere near what we saw last year, and I expect the markets to remain far, far, far above the lows of October and March.

Which are the sectors in the Indian economy that you are bullish on?

I am bullish on all sectors which are domestic economy dependent and underpenetrated. Banking, retailing, infrastructure, pharma are among the key ones.

What is your reading of the key events likely to play out in world markets over the next few months, and what implications do you see for India?

I do not expect that the western and the developed economies can make any meaningful recovery and sustain it. Mr Bernanke is well known for his views of having a loose monetary and fiscal policy in times of difficult economic conditions. Thus, I believe interest rate worldwide in general, and in the western world in particular, are not going to go up in a hurry. Even if the western and developed world do not make any meaningful recovery, I see no reason why the Indian economy and the Indian markets cannot continue to sail alone smoothly. If the world does not recover, commodity prices will remain moderate, which is a big plus for India. What is vital is what happens to Indian software exports. My personal view is that there is more than a fair chance that India will grow well and outperform, even if the world does not recover.

Is there any lurking negative that the market appears to have overlooked?

I think that the western and developed economies are set for sub-par/negative growth for a good period of time. There has to be a transition of both consumption and power from the developed world to the developing world. What effect this will have both economically and geopolitically is a matter of uncertainty and no one can definitely predict the smooth course of this transition. This, I surely think, is a matter that could unsettle markets if the transition is unruly and geopolitically destabilising. Be that so be, I have no doubt in my mind that this transition has to and will take place.

My Comments:
I am a great fan of Rakesh Juhnjhunwala.Why?Maybe because he is eternal BULL like me! Maybe.....but in his pre 2003 days he was a bear.
I was also surprised to read that he is saying that market will burst in couple of months.
But as he has said , he was misinterpreted.......
The reason I like him is because he is a visionary and is able to see things coming up.He was bullish right from 2003 and RJ and Shankar Sharma use to have debates on where the market is going and it turns out always to be hot.Becuase SS always use to speak on bearish side while RJ always speak on Bull side but ultimately RJ proved right all along the bull run uptill 2007 Diwali interview at CNBC.....
I read and hear RJ very keenly and try to understand the finer prints of his interview.....anyone of my reader who have any interview given elsewhere is always invited to give the link or entire interview transcript here.....I will be more then obliged.......


  1. Hi Rajeev,
    Thanks for posting RJ's interview. This is one of the examples how media modifies the views interpreted by RJ.
    Ok. now one query. I came across Infotrek Syscom on MMB.
    My study is as follows- Low equity, Promotors's holding 34.67% (FII-9%), its monopoly in new upcoming sector of e-waste management,earning visibility is doubtful, FV-10, P/E-388 ( as per rediff on 14-10-09),BV-37 (CMP Marginally below BV).
    So this stock has some of your positive points but also few negative.
    So can it become a multi-bagger from CMP?
    With Regards,

  2. Forgot to mention their new web-site is

  3. Rajeev,

    So true. RJ is a true visionery. BTW just like him your name too starts from R. So now I know from which letter to name a person to make them bullish in life. LOL


  4. Hi Rajiv

    Wishing you a very happy Diwali.

    As your follower we expect some bonanza this Diwali from you. If you could suggest a few stocks which we can buy now and see them only next Diwali ( No tracking in between) I mean buy and forget category.



  5. hi rajeev, hv bn readin ur blog is a link am sure u wud jus love :)

    njoy buddy...& happy diwali :))





  7. Dear Vikas,
    I like Infotrack and I am tracking it too.But can't say they have monopoly.That is too big a word to start with a co which is still very small.
    It will take time to prosper.Be ready for that.
    I have given 2 stocks today in one of my post.Find them out and try to go through them and then revert.
    I am surprised to see people not at all talking on them.....
    But this again prove that no one is observing keenly what is written in my post....

  8. Dear Rajeev,
    I go through your post and find about Intense Technologies that they had develop some suite , which is very fast as intel manufacturer call them at their china office in 2007. Their product is adopted by almost all telcom companies in india now they are entering in banking sector.Now they are also adding global client. On technical terms I just asked one of my freind to inquire about this company as he is working with IBM in same field


  9. hi rajeev

    thanks to you for all your reco's. i entered gayatri projects day you recommended.its more than doubled now..keep up the good work.

    Happy and prosperous diwali to you and all the boarders here.


  10. Dear Thinktanck,
    Good to see u diggin with Intense Techno.
    There was one other stock as well in the same post.....

  11. hi rajeev

    i have read about avantel and found from bse that its got a very low equity of about 4.8 cr, got a order from boeing for 1.3 million dollars , buyback at 50 just done. In past it has got orders from indian gov. for supplying sattelite equipment to coastal guards. i am still digging on it.


  12. Rajeev Bhai,
    Intense Technologies Ltd. is a premier software products company with its products iECM in the space of Workflow & DMS, iECCM in the space of Bill/Statement design & communication, iEIM in the space of Reporting & Analytics.
    It has been instrumental in these business since 1990 with quite a good base of esteemed clientele across Telecom, BFSI, Manufacturing.

    Specialties: Customer Communication Management, Content Management, Email Response Management, Contract Management System, Billing Revenue Audit Assurance System, Enterprise Bill Presentment & Payment, Hosted Enterprise Content Management

    Good development is they have tied up with Hitachi to market their products along with Hitachi's hardware solutions.
    They are also partner with Datamation a malysian company in similar field.

    6,00000 warrants convertible into equity shares at Rs 30 each to Bennett & Collman

    Equity = 18.64 Cr (This is less is a positive)
    Promoter holding = 9%. (This is a negative)
    Sector is IT
    Earning visibility = If the partnership with Hitachi and Datmation clicks then it will be excellent
    10 paid up, so is positive
    P/E = 8.51
    BV is 22.42, the current price is less than BV (positive)

    Rajeev bhai - please provide comments.

  13. Sandeep,
    Tanla is 1 paidup and 65 means 10 paid up and 650.
    I would like u to go ahead and look at KPIT Cummins which is at rs 77 and 2 paidup.....

  14. Dear Rajeev Bhai
    Could you give us one pick for tommorow's mahurat trading which we can keep till next mahurat for a good appreciation.thanks and wishing you a Happy Diwali.

  15. Hi rajeev, went through both of your stock. but i would put my money for Avantel. Though above book value it has Good last 5 years earning, good dividend yield, nice promotor holding,signed contract with The Boeing Company, USA, to supply of Airborne Satellite communication equipment worth $1.3 million USD.
    Its my personal view. By the way,is Bennett & Collman traded on BSE/ NSE? Or its on NYSE?
    Again forgetting,

  16. Dear Rajeev Ji,
    What I think about avental is that they are working on GPS front.Yes they get order from Boeing , Defense , DTC . AS you know india is far behind in GPS technologies. I am searching for that company who took pain to get all these data collected. I buy genesys International that is in Geographical Information Systems But Their Promoter are more interested in financial dealing but still like the share . I also find Kalyani net ventures are in GPS business in big way but I dont know which kalyani group listed company holds that share.